The maker of Post-it notes, industrial coatings, ceramics and other consumer products said Thursday the restructuring would reduce its number of operating units from five to four and is expected to save about $225 million to $250 million a year. The St. Paul Minnesota-based company anticipates a pretax charge of about $150 million, or 20 cents per share, this year.
Of the five current units, only the health care group saw an increase in sales, albeit a modest 0.3% uptick. The other four units -- industrial, safety and graphics, electronics and energy, and consumer -- saw sales declines ranging from 1.9% to 11.8%. The company said effective April 1 it had restructured to four units: safety and industrial, transportation and electronics, health care and consumer.
3M lowered its full-year earnings guidance. The company now foresees its 2019 adjusted earnings in a range of $9.25 to $9.75 per share. Its prior outlook was for $10.45 to $10.90 per share. Analysts surveyed by FactSet expect $10.40 per share, on average.
The company took a $548 million charge in the quarter, or 72 cents a share, to resolve current and future litigation. 3M set aside a reserve of $235 million for "certain environmental matters and litigation" and an additional $313 million to address current and expected coal mine dust lawsuits in Kentucky and West Virginia. Citi analyst Andrew Kaplowitz said in a client note that the litigation "may play a more prominent role in the 3M story for an extended period of time."
3M Co. earned $891 million, or $1.51 per share, in the first quarter. Adjusted for one-time costs, earnings were $2.23 per share. That missed the $2.50 per share that analysts surveyed by Zacks Investment Research were looking for.
Revenue was $7.86 billion in the period, down 5% year over year and also falling short of Street forecasts of $8.09 billion. A year ago, 3M posted adjusted earnings per share of $2.50 on revenue of $8.28 billion.
Shares closed at $190.72, down $28.36, or 13%, the stock's largest one-day decline since Black Friday, 1987.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MMM at https://www.zacks.com/ap/MMM